The Energy Regulation Board (ERB) has announced the reduction of fuel prices from K16.06 to K15.20 on Petrol, K14.65 to K13.34 on Diesel and K16.94 to K15.72 Low Sulphur Diesel, effective midnight tonight.

ERB adds that the reduction is due to reduced movements in the international oil prices and the exchange rate between the Kwacha and US Dollar.

In a statement issued, Thursday, ERB Board Chairman Ratmond Mpundu stated that the new prices were to take effect midnight and failure by retailers to effect these changes would attract regulatory sanctions.

“Approved retail pump prices; Petrol was 16.06, new [price] 15.20, variance 0.86. Diesel was 14.65, new 13.43, variance 1.22. Low Sulphur Gasoil (LSG) 16.94, new 15.72, variance 1.22. The new prices are to take effect today (yesterday) February 28, at midnight,” he stated.

“Following this reduction in prices, retailers of petroleum products are reminded that failure to effect these changes shall attract regulatory sanctions. Our inspectors shall therefore be dispatched to monitor service stations and ensure that the new prices are implemented timely so that consumers are not taken advantage of. Further consumers are advised to report any service station that fails to implement the price reduction timely to the ERB through the Toll Free Line 8484.”

Mpundu stated that the price reduction had been largely influenced by movements in international oil prices, the exchange rate between the Kwacha and US Dollar and recent amendments to the Customs and Excise Act.

He added that ERB had reviewed the wholesale and pump prices of fuel for the most recently imported cargo of petroleum feedstock and finished petroleum products and determined that a reduction be made.

“This adjustment of pump prices is consistent with government policy to review fuel prices of every cargo, which lasts about 60 days taking into account changes in the economic fundamentals at any one given time. This price reduction based on a review of; (i)The 100,689 metric tonnes of petroleum feedstock cargo imported in January 2019 at a cost of US$69.51 million. (ii) Imported finished petroleum products supplied to government comprising, 28,221m3 of petrol and 70,493.50m3 of Low Sulphur Gasoil at a total cost of US$62.91 million,” Mpundu stated.

He noted that after the price adjustment in October 2018, international oil prices significantly dropped while the Kwacha continued to depreciate steadily to around K12/US$.

Mpundu stated that the sustained depreciation of the Kwacha implied that the possible gains from reduced international oil prices had been slightly negated.

He noted that while prices of petroleum products were consistently reviewed in 2018, there were only two price adjustments made upwards in February and October 2018, respectively.